How to raise a seed round: a step-by-step guide
From preparation to closing: when to raise, how much, valuation, the term sheet, due diligence and the legal process for a seed round.
By Editorial Team
A seed round is the first institutional investment a startup raises to reach product–market fit and show early signs of growth. This guide walks through the process step by step.
1. Pick the right moment
The best time to raise is when you can say clearly which concrete milestone the money will reach: launching the product, signing the first paying customers or hitting a revenue level. Start before cash runs low; rounds usually take longer than expected.
2. Decide how much to raise
Size the round by the time needed to reach your next major milestone. A common approach is to target 18–24 months of runway. Break the spending plan down into team, product, marketing and overheads.
3. Prepare your documents
- Investor pitch deck
- Financial model and use-of-funds plan
- Up-to-date cap table
- Company documents: articles of association, any shareholders' agreement, IP assignments
- Evidence for key metrics: users, revenue, growth data
4. Build an investor list
List angels and early-stage funds that match your sector and stage. Warm introductions work far better than cold emails. Run meetings in parallel over a few weeks; it shortens the process and strengthens your negotiating position.
5. Valuation and instrument
At seed, valuation reflects the team, market size, traction and comparable companies. Don't treat valuation as a number to maximise: a very high valuation can make the next round harder.
In Türkiye, early-stage investments are mostly made through a capital increase in which the investor receives shares. Convertible instruments and offshore holding structures are also used. Always decide on the right structure with a lawyer.
6. The term sheet
If an investor is interested they will send a term sheet with the key terms. Pay attention to:
- Amount and valuation: pre-money and post-money valuation
- Option pool (ESOP): whether the employee pool is carved out before or after the valuation
- Liquidation preference: the investor's right to get their money back first if the company is sold
- Governance and vetoes: board composition and decisions that need investor approval
- Founder vesting: founders earning their shares over time
7. Due diligence and closing
After the term sheet is signed, the investor reviews the company's legal, financial and commercial position. Then the investment agreement and, where needed, a shareholders' agreement are signed, the capital increase is approved and registered, and the funds are transferred.
After closing
Send your investors a short regular update (monthly or quarterly): metrics, wins, challenges and where you need help. Good investor relations become your strongest reference for the next round.
This guide is for general information only and is not legal, financial or investment advice. Check official sources and consult professionals for current terms.
